Tax overhaul efforts in Washington are being shaped by a debate about whether it is workers or investors who bear the greater burden of U.S. corporate taxes.

If the load falls mainly on investors, cutting corporate taxes will mostly benefit high-income households, in which there is a greater proportion of stockholdings, through dividends and other disbursements. If employees bear the brunt of the burden, corporate-tax cuts could be a path to boosting middle-class incomes by raising wages and employment opportunities, which would support the Trump administration’s promise to tilt tax cuts toward the middle class.

Economists largely agree that workers do shoulder a part of the corporate-tax burden and that permanent cuts could help them, particularly if those changes encourage investment. But agreement largely ends there, with wide-ranging differences of opinion about how the share of the tax burden is divided.

“This is about creating jobs,” Treasury Secretary Steven Mnuchin said on CBS in April, because many surveys show that 70% or more of the tax burden is borne by the American worker. This is about putting money back in the American worker’s pocket.”

Last month, Mr. Mnuchin offered an increased estimate, saying 80% of business taxes are paid by workers.

Although some research supports a 70-30 labor-capital breakdown, many other analyses cut the other way, including work by Treasury Department staff in 2012 and estimates used by the Congressional Budget Office and the Joint Committee on Taxation.

However, no academic model or foreign data perfectly captures what would happen if the U.S. was to change its 35% corporate-tax rate for the first time since 1993.

“There’s a pretty wide band of possible outcomes that are plausible,” said Alan Auerbach, a tax economist at the University of California, Berkeley.

Until a few years ago, the Treasury Department and the JCT assumed the burden of corporate taxes fell entirely on owners of capital.

The nature of a global economy complicates the situation, however, as corporations are taxed differently depending on their location and as capital flows easily across borders. A high corporate tax pushes investment and hiring to foreign economies, punishing domestic workers. By this logic, reducing the corporate tax could help domestic workers by drawing in capital.

That effect is in turn countered by the fact that the world economy isn’t entirely open and there isn’t unlimited investment that would flow into one country if its taxes dropped.

“I don’t think any paper finds that it’s a negligible incidence on workers,” said Aparna Mathur, a resident scholar at the American Enterprise Institute.

The Treasury Department under Mr. Mnuchin pointed to a 2015 study by Céline Azémar and Glenn Hubbard that estimated that a $1 increase in corporate taxes leads to a 60-cent decline in wages, suggesting a tight link between the two, with labor bearing about 60% of the corporate tax burden. The study also says, however, that the effect is muted in larger economies.

Tax Avoidance

My take is the preponderance of the corporate tax burden falls on workers and consumers: On workers when companies offshore and on consumers when corporations raise prices to their desired rate of return.

The issue is complicated as tax avoidance comes into play. For example, GE paid no corporate income tax in a recent 8-year period.

Eighteen companies including General Electric, International Paper, Priceline.com and PG&E, incurred a total federal income tax bill of less than zero over the entire eight-year period — meaning they received rebates.

Rally Cry: It’s Not Fair!

With that GE disclosure comes the rally cry, “It’s not fair!”. Indeed it isn’t fair, but not in the implied way.

What is “fair share” other than some undefined, convoluted concoction used to advocate higher taxes across the board on everything?

Corporations that pay no taxes have masses of corporate lawyers, lobbying groups that carve out special deals in congress, and methods that shift profits (and sometimes production) overseas to tax havens.

Corporations waste time and money concocting such schemes. And it drives profits and production overseas. That’s what’s really unfair.

Case for Zero Taxes

Here is the key point: “I don’t think any paper finds that it’s a negligible incidence on workers,” said Aparna Mathur, a resident scholar at the American Enterprise Institute.

We can debate whether the worker percentage is 35% or 80%, but no matter what it is, why not eliminate it?

This would be a win-win situation, no matter what percentages apply.

And if we eliminate corporate taxes, corporations can fire a bunch of unneeded corporate tax lawyers who do little more than concoct elaborate schemes that drive corporate profits and employment overseas.

If we really want to try something different, how about zero percent taxes in the US and some slightly higher rate overseas? That would reverse in one-second flat overseas avoidance. It would also encourage foreign businesses to move part of their operations here!

The only way to eliminate the burden on workers is to eliminate the burden on corporations.

But No! The “fair share” advocates don’t want win-win, they want the workers to get it all. It’s impossible.

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53 thoughts on “Case for Zero Corporate Taxes: Who Really Pays Them?”

I don’t know how corporate taxes a levied in the rest of the world, but when we state that US taxes are 35%, that is of profit. Wages come off pre-profit. It is customers who pay all expenses and profit and taxes and dividends and buybacks. While removing corporate tax may encourage companies to seek more profit, customers always pay.

We have a high standard of living in the U. S. because we enjoy high worker productivity and corporate efficiency. Every tax makes us less efficient. Taxes draw away resources from efficient firms to fund government inefficiency. Taxes hurt everyone because they lower the standard of living for everyone.

No matter what the “labor capital breakdown” is (you really have to be one heck of a single minded halfwit, to genuinely believe that kind of drummed up nonsense means anything at all in practice…), it ain’t 100/0. Which is the case with personal income taxes.

All tax cuts (at least until we get to a federal government less that 2% of GDP) are obviously positive. In isolation.. But conveniently omitted from this hype, is that the yahoos involved want to pretend their plan is “revenue neutral.” And when that pretension fails, to make sure additional borrowing makes up for the difference. So cutting corporate taxes, are not even remotely considered in isolation.

And, you can be 100% sure, that the “labor-capital breakdown” of the revenue sources that will compensate for the lower corporate taxes, are much less favorable to workers, than the one for corporate taxes. The cost of additional borrowing, in a ZIRP Fiat age, is literally borne MORE THAN 100% by workers, and by retired workers trying to live off of savings. After all, “capital” can afford more lobbyists than “labor” (and “geezer”….), so that’s how things always go in Dystopia.

Back in the real world, away from pseudo academic idiotopia, the only real effect of corporate taxes meaningfully lower than individual ones, is not to fire the army of tax lawyers (lawyers have the most powerful lobby of them all….). But just to repurpose them. Away from foreign loopholes; towards coming up with cheesy schemes by which “retained earnings” are spent on such “obviously useful things” as investment in jets, golf memberships, yacht charters, private security, “representation cars”…… Anyone care to guess what the “labor-capital breakdown” of that spending is………..

What about tax avoidance? If the corporate tax rate is 0 and the personal tax rate is 25%, instead of becoming an employee at $100k/year, I start a corporation, hire myself at $15k/year but charge my previous employer $100k for my services and get $85k in “profit” tax free. Drastically differing tax rates encourage this type of shit. P.S., I’m not an accountant :-).

You can start a corporation, but I don’t think you can use the money for personal expenses. So you would still have to get the money out of the corporation and pay a personal income tax in the process.

A company is a distinct legal entity, so any withdrawals from the company must be either a salary or dividends or even share buy backs. Your house might be bought through the company, but you don’t own it: the company does.

You are correct. In fact, this arbitrage already goes on today. If your personal marginal tax rate is 40% and company tax rates are 25% there is an incentive there to arbitrage those rates by setting yourself up as a ‘company’. There is plenty of scope to mitigate your tax liability in these structures and many people do just this.

I’m not sure whether the loophole still exists but there was a huge scam going on where people were setting themselves up as non-profit organisations and reaping very beneficial tax treatment.

The stuff that goes on that the average Joe doesn’t know about would boggle their minds.

“…corporations can fire a bunch of unneeded corporate tax lawyers…how about zero percent taxes in the US and some slightly higher rate overseas? That would reverse in one-second flat overseas avoidance. It would also encourage foreign businesses to move part of their operations here!”

Bravo! But what happened to completely free trade no matter what, disparate political and economic climates be damned?

Corporate taxes were created because it’s easier to collect from a few entities than collect from millions of people especially when many people paid cash at the time.. So it’s really a tax on consumers and always has been. The point of collection was just a matter of convenience. But that will never stop a politician from grandstanding.

And, if for some harebrained reason, you do feel compelled to collect taxes on income, collecting it from entities that spend time and effort on accounting for revenue and expenses already, is much less both intrusive and inefficient, than forcing every man, woman and child to waste untold hours and amounts on complying with ever more complex tax codes.

Another big boon from collecting you collect from income at the corporate level, is that it prevents the world’s hopeless social engineers, from using the tax code to bully people into behaving the way The Man wants them to. Without individual income taxes, there are no room for deductions for anything from electric cars to mortgage interests.

They can try to social engineer corporate behavior. But corporations, by virtue of generally being much larger, and better funded and connected, than most individuals, are much better positioned to fight back.

So Tesla and GE are not taxed based upon social or political engineering?
Sales tax is the most transparent and fair as everyone who consumes pays and yet it can be made to exempt basic needs like food and basic lodging and HEALTHCARE. And most businesses already tax and report sales tax, the infrastructure is already in place and the best part is that every person knows EXACTLY how much tax they paid as it is a line item on their receipt….which is of course why it will NEVER happen. So much of our tax argument is over who pays and who doesn’t yet this is almost completely based upon perception. Transparency on this issue would go far to resolving these arguments
We know the solutions to most of our issues, and also understand WHY we will never experience them as it is those benefiting from the corrupt and inefficient systems currently in place that will make sure they never end.

Ditching all income taxes, individual as well as corporate, in favor of one sales tax, is definitely an improvement over any system including an income tax. But you can’t have all manners of exemptions, for whatever some lobbyist claims is “basic needs”, “investment not spending” blah, blah. Just a straight up transaction tax: Every single time a dollar changes hands, for whatever reason, 10% or whatever goes to the junta…

Of course, such a scheme requires exactly the kind of spy apparatus to enforce, that will guarantee that any population gullible and dumb enough to accept the legitimacy of any form of activity taxation, will always be no more than petty serfs to a police state.

Instead, just tax property. It requires literally no spying at all. Whomever pays the tax on a lot of land, receives the government’s help in protecting it from others. Stop paying, and whomever picks up the tab gets help from the PoPo to evict those who don’t. 100% self reinforcing, no Stasi nor Gestapo required.

A straight tariff on all goods, or people for that matter, crossing the border inbound, while requiring spying, doesn’t require any added spying than what is required of a government with some semblance of border authority to begin with.

Combine those two, while dumping all the rest of the harebrained stupidities that passes for acceptable revenue raising schemes in progressive dystopias, and you’ll in one fell swoop, taken America as far in the direction of greatness, competitiveness and equitableness as it is possible to do, per any given size of government.

Well said John,. Besides the problem really isn’t tax collection, its government spending. Focus on cutting down the spend and then using the delta to pay down the 20 trillion in debt. Oh, that’s right, it’s a debt Ponzi. Nobody ever intends to pay that debt. Silly me for suggesting that conservatives should pay their debts by definition.

The case for a zero corporate tax rate is overwhelming. Many tens of billions are wasted in preparing and negotiating corporate taxes, as I have seen firsthand, while relatively little revenue is collected, while discouraging much corporate activity..Many corporations would move to the US under such a regime..Whereas the taxation of dividends is highly profitable…My law school professor, former General Counsel of the IRS under Eisenhower, said that in his day, Congress understood this, but couldn’t act because of the populist hatred of corporations paying no tax, which many of them do anyway now.

They told us that the use of illegal labor by the construction industry would trickle down and reduce the selling price of a new home for the consumer. Have you looked at the California home prices lately? How’s that ‘trickle down’ theory worked out?

“Corporations that pay no taxes have masses of corporate lawyers, lobbying groups that carve out special deals in congress, and methods that shift profits (and sometimes production) overseas to tax havens.”

…

Exactly … and why it will never happen.

1) No corporate taxes puts a million well paid accountants out of work. Their lobby will fight this tooth and nail.

2) What’s in it for Congress? Allowing lobbyists to write legislation that favors their company / industry – for a handsome fee – provides Congressional campaign coffers with a never ending supply of $$s. Zero taxes cuts this out.

3) A few years ago when tax reform dominated the headlines, The Hill ran a story on how – surprise surprise – corporations were not in favor of tax cuts (talk was of tax cut, not elimination, however) if it meant they had to give up their loopholes.

I looked at the section titled “Ditch the corporate income tax.” I have issues with what I read but there isn’t much to go on there. His view on how this will all flow through to the workers’ benefit is not explained at all.

Corporations can set prices and wages wherever they want to try and recoup taxes. Consumers and workers are not compelled to pay those prices or accept those wages, however (unless that’s part of the bill).

Until the tax burden cuts profits to zero, corporations can and will eat it. They have no choice… other than purchasing congresspeople to try and get the law changed.

Focusing on taxes misses the point once you understand that money itself is a contrivance that is primarily constructed to benefit government. The notion that it is productivity that is rewarded with capital is lost when we consider that it is those who produce the least who profit the most. As my father always said, he was too busy working for a living to make any money. Money is the result of speculation, not productivity. Even supposed geniuses like Gates and Musk primarily relied on the work of others to actually create their “innovations”.
In our prehistoric and oppressive past, men were the primary “earner” in a traditional marital relationship, and as the only the “earner” was taxed and his earning necessity was less given he had a wife working at home, cooking cleaning and raising the children, and if really lucky, growing much of their own food. Now that women have been “liberated” and are working alongside their “significant other” or “partner”, they pay the full tax load on their income plus find themselves purchasing more prepared food that they pay taxes on, paying for cleaning and child care and so much more that is all taxed as well. Now I ask anyone, WHO benefited from all of that?
Fiat currency and jobs…….the great advancements of our progressive world.
We are told we are entitled but I would contend we are only entitled to that which we can produce with our own minds and hands. What we find instead is a life which we are born into debt and servitude. A world that is becoming impossible to live within without being beholden to some great and powerful government who promises. Our only entitlement is taxation and the LIE that they will always be paid by someone else. Taxing those who provide us our goods, services and JOBS is FRAUD as it is a burden that ALWAYS falls on the consumers…..BUT LETS PRETEND NOT.
Rather than working for our survival and personal satisfaction we instead work for money that we are taxed to earn, taxed to spend and taxed to own (property taxes), pay the hidden and compounded taxes inherent in the costs of all of our purchases and the best part is that they tell us they MUST stimulate inflation for economic “growth” and then have the nerve to actually TAX us for interest gains from savings accounts that don’t even cover inflation.

Regardless of who pays the corporate tax, labor, or the consumer. There has to be taxes to pay the bills. If we seriously want to get rid of taxes then let’s also discuss what programs we want to get rid of at the same time. If you do not have taxes then how are the bills even in part to be paid?

Taxation is about fairness and accountability. It should be apparent that no amount of taxation is enough to pay the bills, and it should also be apparent that in our consumerist world, there is no unwillingness to spend, we simply need to believe we have some choice in it and that we are getting our money’s worth….something that is about as far from our current system as you can imagine.
A sales tax that every person can see at purchase without the help of a CPA or financial wonk will satisfy one side of the equation, but getting our money’s worth is going to be far more difficult. It could start with a constitutional amendment that requires a BUDGET and could also include a percentage limit on deficit debt. We got rules for everything and everyone else, so why not our government?

Never been the case, not even in fairy tales. Taxation is about the sovereign obtaining whatever revenues it wants for whatever purposes it wants. Fairness is irrelevant. Accountability will always be avoided (e.g. national security agencies, the Fed). In the USA the real reason to increase welfare benefits ad infinitum is gaining and maintaining power, and functionally it is a bribe to vote accordingly. Warfare has its own constituency. You just saw government in action again with Obamacare, where the sentiment is to expand federal spending on Medicaid for the states and bailout the health insurance industry.

Trump will probably ask for import tariffs (consumption taxes, a national sales tax on imported goods) to pay for corporate tax cuts. Whatever benefits workers get from corporate tax cuts would be more than recouped via this national sales tax. Net-net, workers will be no better off, maybe even poorer. Workers would benefit more directly from cuts in personal taxes and Social Security/payroll taxes, which would also make it less costly for corporations to hire workers. Lower corporate or payroll taxes would be expected to led to more investment and jobs. National sales taxes (e.g. import tariffs, VATs) are a financial death wish, certainly not “fair,” as they will be continually increased (almost 30% in Spain) and are additive onto state sales taxes, state and federal income taxes, gas taxes, etc. Better to halve corporate taxes without adding new taxes, and then monitor job and revenue effects. Reducing corporate taxes by half or more should be regarded as an experiment. Empirical evidence (e.g. Ireland) indicates low corporate tax rate benefits; likewise tariffs and sales taxes slow growth.

Monetary Sovereign governments are free to buy debts without recourse to taxation or borrowings. The Constitution says as much. Taxes have other purposes, such as reducing spending and thus regulating the economy to mention just one. Fairness and accountability are important too.

If you think taxes are irrelevant and we can just snap our fingers and the money will be taken care of you are both delusional. There will come a point, soon, that if the people keep refusing to pay taxes and the spending continues we will find ourselves further down the road toward banana republic, when money continues only more rapidly to disappear then there will be fighting, real fighting over what is to paid for and therefore exist.

If a tax is levied on a corporation, and if the corporation hopes to survive, it will have one of three responses to that tax or some combination thereof. It will raise the price of its product, lower dividends or lay off workers. In each case, a flesh-and-blood person is made worse off. The important point is that a corporation is a legal fiction and as such does not pay taxes. As it turns out, corporations are merely tax collectors for the government.

Politicians love to trick people by suggesting that they will not impose taxes on them but on some other entity instead.

Too many Americans are ignorant, and thus fall easy prey to the nation’s charlatans and quacks.

Income tax in general is a joke. Massive amounts of time and effort are spent on avoidance both personal and corporate. Moreover, it is completely antithetical to industry, production and investment. We should be encouraging industry, production and investment in the US.

A point-of-sale consumption tax which penalizes consumption within the United States is the way to go. If the US sells to the outside world, thereby realizing a net gain, the US accrues wealth. If companies outside the US sell within the US, taxes are levied and government and infrastructure is thereby paid. It is such a sensible idea that politicians will never be able to grasp it.

No, it is not regressive because nobody is talking about cancelling the myriad aid programs which exist for the truly destitute. There will not be any increase in starvation or displacement as long as those programs remain funded. Also, if there is more industry, production and investment in the US, the destitute will be able to get jobs and become productive, thereby ending any short-term effect from the transition.

–> “President Trump and Congress have their eyes on a tax overhaul now that Obamacare replacement has died.”

No arguing that Paul Ryan and Mitch McConnell scuttled Obamacare REPEAL by insisting that their revised objective is “repeal and replace, but keep Congress on a better plan”.

But Obamacare is still a threat to the regime (the federal government). Only a fool thinks the US government can run perpetual deficits for the next three decades (on top of $20 trillion in the whole already).

Obamacare will get repealed, because the alternative is the US government will collapse. Its not the first 1000 year empire that gets rudely swatted down after a quarter of that time by its own ineptitude.

Are you part of the military industrial complex? War monger? How are you going to pay for all your bombs and bullets and aircraft carriers — when 100+% of the budget is taken up by so-called entitlements and debt interest?

Are you a welfare rat? Bleeding heart liberal? How are you going to finance your something for nothing programs? End food stamps as you know it, with 100+% of the budget going to entitlements and debt.

Are you a useless parasite? Member of Congress? Yeah, there is no money for your endless personal servants and go-fers (staffers you call them?). Actually, no money for regulators or courts of law or secret service protection. All the tax revenue is going to pay for entitlements and debt interest — nothing left for “writing policy” whatever that is.

Are you one of those people who thinks the government can always print money? Are you arrogant enough to believe every other government throughout history (the ones that collapsed already) didn’t think of that idea first? It didn’t work for them, and it won’t work for the US government either. You can print wampum, but you can’t print wealth.

The US government didn’t have income taxes until it got involved in WW1… back when the USA was an emerging economy with lots of economic growth, a minimal government funded itself with small user fees and small import tariffs. When the government tried to be all things to all people, it quickly ran out of money. A massive income tax was quickly spent and then some.

Spending is the problem. Out of control spending is why Illinois is collapsing faster than California. Its why the mighty British Empire collapsed and is currently struggling to brexit itself from the socialists in Brussels (after the UK went bankrupt in the 1970s as a stand alone socialist failure). Spending is why the French empire collapsed, its why the Russian empire collapsed, its why the Spanish empire collapsed, its why the Roman empire collapsed…. and out of control spending is how the US government will collapse.

For those who want to kick the can down the road, medicare goes cash flow bankrupt in 2019 (if Obamacare doesn’t bankrupt it first). The GAO predicts Social Security will be bankrupt by 2030. Either all pensions will collapse under artificially low interest rates, or the federal government is going to have to pay higher interest rates on Obama’s $20 trillion spending spree — its just a question of who gets hurt the most: local/state governments or the federal government.

Congress had the opportunity to repeal Obamacare on their own terms, they failed — so now it will get repealed on terms dictated by creditors…. creditors won’t be as generous.

Replace the entire tax system with only one tax, 3% tax on ALL revenue no deductions on anything. No income tax etc. Treasury prints interest free money for infrastructure related development that adds said value to economy, ie build a dam – once built (water/hydro) could have been sold to recoup loss, however it may not be sold as its value underlies the value of printed currency.

For family business I’d have the tax kick in only after above say $1,000,000 in revenue.

I’d keep capital gains tax however, and an additional tax on rent seeking/banking.

How can you advocate a consumption tax on citizens, but not on ‘creative’ corporations?

Taxing revenue becomes a much fairer consumption tax in effect by virtue of the fact that all grey economies are affected, that is corporations cannot hide/transfer wealth offshore. A three % revenue tax would translate into a 3+X% consumption tax in the final good or service.

A corporate revenue tax is simply a cost of doing business before profit. In some cases totally covered by firing tax legal experts and compliance costs, let alone all the deductions that would not have been purchased except for the tax write-off..

Allowing common folk to pay no income tax is a pretty big incentive to work allowing a more level playing field breaking the dependence of corporate structures into a more decentralised community minded world. Only the free ride corporations get with access to cheap money, then needs to be addressed.

You seem to think every other failed empire didn’t think about printing “free” money. Why do you think it didn’t work for ANY other empire?

There is no such thing as a free lunch, and you are not qualified to graduate from kindergarten if you don’t grasp something so obvious.

Meanwhile, your 3% tax on an economy growing 3-4% (historical “norm”, Obama’s debt binge grew at only 2%). Anyway, your 3% tax on an economy growing 4% will very quickly go bankrupt trying to fund a spending program that grows 30% per year (e.g. Obamacare).

There is no future for the USA unless Obamacare gets repealed. There is no tax rate that can allow an economy growing 7-8% (something the US has rarely achieved for a half year) to fund spending that grows 30%.

30 is greater than 8. There is no free lunch. These are truisms you should have figured out in kindergarten

With so many people thinking that deficit government spending helps drive the economy at some point our leaders and those across the globe might want to give us taxpayers a break. Why Not Stop Taxation Altogether? It would send the GDP soaring.

Just End It! Such a policy would go a long way to diminish the divide polarizing our nation. I do not know anyone who likes to pay taxes or go through hours and hours of record keeping and filling out forms. The article below delves into the benefits of such a policy.

Because their constituency is TOO STUPID to realize who is actually paying the tax, as if the tax wasn’t part of the equation of what a business can afford to pay their workers and what price they can charge customers for their product and still make a few percent profit. NO, the tax is just EATEN by those “greedy” businesses. Sheesh…

Stupid people and those feeding upon their stupidity (tax lawyers, Dem politicians, etc.) are why we can’t have nice things. Considering the IQ bell curve and the number of people even on the right hand side of that curve who can’t think and reason critically, this has been the perpetual human condition.

Who Pays Taxes — The Consumer. Incomes to individuals and corporations only exist because the consumer buys the product or service, and the price paid by the consumer must include all embedded taxes.

Prices go up faster than tax percentage. If cost plus modest profit is $1.00; at 0% tax price is $1.00, at 25% tax price is $1.33, at 50% tax price is $2.00.

The type of tax indicates the collection method, how and when such taxes become revenue for the government entity.

The tax burden ultimately is determined by the amount of government spending that is not covered by debt.

If you are going to discuss reducing taxes, you must be clear whether you are reducing the total burden or a tax rate. For example, if you assume the tax burden is static and the corporate rate goes to zero, you must either assume that other tax rates go up to compensate, or as a result of charging less per item because of reduction in the embedded taxes, the volume of sales goes up enough to make up the difference.

Note that in the simple case mentioned, where individual income taxes are 70% and corporate is 30%, volume of sales would have to go up only 42%, at the lower price to make up the corporate share.

I don’t see anyone cutting government spending, and a 42% rise in units sold is unrealistic, so how do we get there?

If it was paired with a flat tax, there would be one rate charged on individual and corporate incomes for the entire country.

Obviously, gross salaries would be fully deductible. Imported supplies or final products would not be deductible, so in effect the flat tax would be added to them by not allowing the deduction of cost.

Therefore, anything consumed in the US would have the full flat tax applied by the time the final sale is made.

Any exports would not be subject to corporate tax, but would have been taxed at the component level plus taxes on salaries.

Since we import more than we export and exports would be partially taxed, we will have broadened the tax base, enough to lower the future flat rate by 2%.

BAT is a bit of a misnomer, since we are not adding a tax at the border, we are just not allowing imports as deductible costs. If we plan to do that, I would eliminate all tariffs at the same time. Take that, Sugar!

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